U.S. pressures Vietnam to dismiss Chinese firms in subsea cable plans

U.S.

• Vietnam’s current undersea cables, which link the country to the global internet, have experienced repeated failures.
• A Vietnamese official noted that offers from Chinese companies, including HMN Tech, are often cheaper than alternatives.

OUR TAKE
The subsea cables will improve not only Vietnam’s connectivity but also its links to neighbouring countries and regions. This can lead to enhanced collaboration in trade, technology, and information exchange, benefiting the broader Southeast Asian economy. Vietnam’s decisions on its cable partnerships may signal its alignment with either superpower, affecting regional dynamics and alliances.
-Lia Xu, BTW reporter

What happened

The United States is intensifying its efforts to steer Vietnam away from Chinese companies, particularly HMN, in its ambitious plans to build ten new undersea cables by 2030. U.S. officials have conducted a series of meetings with Vietnamese leaders and industry stakeholders, emphasising the need for reliable and secure cable-laying contractors. Sources indicate that these discussions, which began in early 2023, have focused on the potential risks associated with choosing less experienced firms like HMN, which is viewed by Washington as closely linked to Chinese tech giant Huawei.

Despite U.S. concerns, Vietnam has shown a degree of openness towards collaboration with Chinese firms, attracted by their competitive pricing. As Vietnam navigates these complex dynamics, the stakes are high. Both the U.S. and China are vying for influence in the region, with recent visits from Presidents Biden and Xi Jinping highlighting the geopolitical significance of these developments.

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Why it’s important

The new subsea cables are crucial for enhancing Vietnam’s internet connectivity and reliability. As the country modernises its digital infrastructure, improved connectivity will support economic growth, attract foreign investment, and facilitate access to global markets. And Vietnam’s existing undersea cables have suffered from repeated failures, which hampers its connectivity to the global internet. Developing new, reliable cables is crucial for Vietnam’s economic growth and digital infrastructure.

The U.S. campaign to influence Vietnam’s subsea cable plans is part of a larger geopolitical strategy to counter China’s growing influence in the region. By promoting alternatives to Chinese firms, the U.S. aims to strengthen its alliances and maintain a competitive edge in Southeast Asia. Besides, the choice of cable contractors can impact foreign investment in Vietnam. U.S. officials have indicated that selecting less experienced contractors could deter U.S. companies from investing, which could have long-term economic consequences for Vietnam.